WEBVTT - China’s New Game Plan for Dealing With Trump Tariffs 0:00:02.720 --> 0:00:07.240 Bloomberg Audio Studios, podcasts, radio news. 0:00:08.400 --> 0:00:12.040 Soon after US President Donald Trump's opening salvo of his 0:00:12.160 --> 0:00:15.480 second trade war, hitting more than five hundred billion dollars 0:00:15.480 --> 0:00:18.960 worth of Chinese goods with a ten percent tariff, China 0:00:19.040 --> 0:00:23.400 retaliated with tariffs of its own, So yeah, r escut 0:00:24.760 --> 0:00:27.760 It imposed ten to fifteen percent levees on fourteen billion 0:00:27.800 --> 0:00:31.640 dollars worth of American goods, including coal, crude oil, and 0:00:31.720 --> 0:00:34.800 cars with larger engines from the likes of GM and Ford. 0:00:35.560 --> 0:00:38.320 Those tariffs went into effect Monday, February tenth. 0:00:39.000 --> 0:00:42.680 China's retaliatory tariffs on fourteen billion dollars of US goods 0:00:42.960 --> 0:00:46.480 also due to kick in today. 0:00:45.800 --> 0:00:49.000 And within hours, Trump slapped a twenty five percent tariff 0:00:49.080 --> 0:00:54.080 on all steel and aluminium imports, industries dominated by China. 0:00:54.160 --> 0:00:56.880 So if it's made in the United States, there is 0:00:57.000 --> 0:00:59.360 no tariff. What you have to do is make it 0:00:59.400 --> 0:01:00.360 in the United States. 0:01:00.400 --> 0:01:01.920 We don't need it from another country. 0:01:03.600 --> 0:01:07.319 Jenny Marsh, who oversees Bloomberg's coverage of Greater China economy 0:01:07.400 --> 0:01:11.000 and politics, says President Si Jinping doesn't appear to be 0:01:11.120 --> 0:01:14.160 flustered by the flurry of tariffs coming from Trump. 0:01:14.400 --> 0:01:17.880 You know you saw Tudor and Mexico's leader both rushing 0:01:17.920 --> 0:01:21.640 together on the phone striking these deals. Chi Jinping setting 0:01:21.680 --> 0:01:25.160 a very sort of cool, calm, collective signal that he 0:01:25.280 --> 0:01:27.960 isn't going to be doing the same thing, like he's 0:01:27.959 --> 0:01:30.680 a much bigger fish, and China's going to respond to 0:01:30.760 --> 0:01:31.360 its own way. 0:01:32.160 --> 0:01:36.360 And Bloomberg opinion columnist Sruly Wren says, China's response this 0:01:36.400 --> 0:01:39.720 time is very different from the first trade war in 0:01:39.760 --> 0:01:40.520 twenty eighteen. 0:01:40.959 --> 0:01:44.280 China is in a much weaker position than twenty eighteen 0:01:44.600 --> 0:01:48.120 when President Trump started his first trade war. What happened 0:01:48.320 --> 0:01:52.320 is that the Chinese economy has become more reliant their 0:01:52.400 --> 0:01:55.920 exports than ever before, and China really doesn't want to 0:01:56.000 --> 0:02:00.160 kill the only bride spot in its economy. 0:02:01.680 --> 0:02:05.680 Welcome to The Big Take Asia from Bloomberg News. I'm wanh. 0:02:06.000 --> 0:02:09.560 Today in the show, we unpacked China's response to Trump's 0:02:09.639 --> 0:02:14.000 barrage of tariffs. Can China avoid a full blown trade 0:02:14.080 --> 0:02:17.240 war with the US, and what's at stake for both 0:02:17.280 --> 0:02:18.600 countries going forward. 0:02:19.360 --> 0:02:29.760 We have one very big power over China, and that's tariffs. 0:02:31.160 --> 0:02:34.919 In the past few weeks, President Trump has proposed and 0:02:34.960 --> 0:02:40.000 delayed twenty five percent tariffs on Canada and Mexico. In comparison, 0:02:40.080 --> 0:02:43.240 the tariffs on China are much lower at just ten percent. 0:02:43.800 --> 0:02:46.160 But Trump says he's just getting started. 0:02:46.440 --> 0:02:50.320 That was just an opening salvo. If we can't make 0:02:50.360 --> 0:02:52.440 a deal with China, then the tariffs who will be very, 0:02:52.520 --> 0:02:54.040 very substantial. 0:02:53.960 --> 0:02:56.720 Jenny, and truly thanks for joining us. Let's get into it. 0:02:56.960 --> 0:02:59.680 In the first trade war, the US and China imposed 0:03:00.400 --> 0:03:03.720 of tit for tat tariffs on each other. Eventually things 0:03:03.760 --> 0:03:05.880 calm down a bit when the two signed a trade 0:03:05.919 --> 0:03:09.280 deal in twenty twenty. We're China basically committed to buying 0:03:09.360 --> 0:03:12.840 more goods from the US. Now, what does Trump really 0:03:12.880 --> 0:03:16.120 want from China this time around? How is it different 0:03:16.160 --> 0:03:17.239 from the first trade war? 0:03:18.000 --> 0:03:20.200 Well, he says he wants to rebalance trade, and I 0:03:20.240 --> 0:03:23.600 think last time that meant getting China to buy more 0:03:23.639 --> 0:03:27.000 from the US. But this time it seems broader. It 0:03:27.040 --> 0:03:30.720 seems like what he actually wants is to get manufacturing 0:03:30.760 --> 0:03:34.200 back on American shores. He really wants to return America 0:03:34.240 --> 0:03:37.320 to this sort of like manufacturing powerhouse it used to be. 0:03:37.920 --> 0:03:40.440 I think the interesting thing is that trade war won, 0:03:40.480 --> 0:03:43.160 and it was all about China, Whereas this time around, 0:03:43.240 --> 0:03:46.720 that's his goal rebalance trade, but with everybody to sort 0:03:46.720 --> 0:03:48.800 of take aim at all these different sort of partners 0:03:48.840 --> 0:03:52.200 and economies of America trades with to bring manufacturing back 0:03:52.240 --> 0:03:54.640 to the US. So it's sort of a much more 0:03:54.680 --> 0:03:58.040 ambitious and wide ranging doctrine that he's trying to roll 0:03:58.080 --> 0:03:59.040 out this time around. 0:03:59.280 --> 0:04:01.840 Now, after you were tarras of ten percent on Chinese 0:04:01.840 --> 0:04:05.200 goods took effect last week, Beijing responded with its own 0:04:05.320 --> 0:04:09.280 round of tariffs. Truly, can you walk us through China's reaction? 0:04:09.680 --> 0:04:12.360 It seems like China's response is quite muted this time. 0:04:12.600 --> 0:04:16.599 Instead of reciprocated ten percent broad based the teriff back 0:04:16.680 --> 0:04:19.680 on the US, China basically targeted a few things like 0:04:19.760 --> 0:04:23.640 oil and natural gas, and it also launched the Toothlip's 0:04:23.760 --> 0:04:27.160 anti trust probe into Google, which basically left China more 0:04:27.200 --> 0:04:30.679 than a decade ago. It really compared to twenty eighteen, 0:04:30.760 --> 0:04:32.200 the response was very muted. 0:04:32.480 --> 0:04:35.880 And what's the rationale behind such a muted response, you think? 0:04:36.080 --> 0:04:38.640 I think the problem with China is that this time 0:04:38.680 --> 0:04:42.280 around twenty twenty five, China is in a much weaker 0:04:42.360 --> 0:04:46.559 position than twenty eighteen, when President Trump started his first 0:04:46.600 --> 0:04:50.600 trade war. China had a notorious COVID zero lockdown, right, 0:04:50.800 --> 0:04:54.040 and after China exited the COVID zero lockdown in late 0:04:54.040 --> 0:04:57.200 twenty twenty two, what the middle class discovered was that 0:04:57.320 --> 0:05:00.720 the economy had long COVID as well. You know, like 0:05:01.040 --> 0:05:04.159 we are four years into the property downturn, and you 0:05:04.320 --> 0:05:09.080 still see those unfinished apartment buildings pappered across China. These 0:05:09.120 --> 0:05:12.719 developers they have already gone defunct, right, and the government 0:05:12.800 --> 0:05:15.760 is not stepping in to finish those buildings and deliver 0:05:15.880 --> 0:05:20.080 presole units to households. Basically, the Chinese people just say, okay, 0:05:20.320 --> 0:05:23.920 the government doesn't care about consumer rights and saving deposits 0:05:23.960 --> 0:05:28.200 basically doubled from twenty eighteen to twenty twenty five, and 0:05:28.440 --> 0:05:32.559 youth unemployment is in double digits. People have money, they're 0:05:32.640 --> 0:05:36.359 just not spending it. As a result, in twenty eighteen, 0:05:36.640 --> 0:05:40.799 consumption accounted for two thirds of China's economic growth. Now 0:05:40.880 --> 0:05:42.360 it's not even one third. 0:05:42.600 --> 0:05:46.040 So basically, in twenty eighteen, China was in a much 0:05:46.080 --> 0:05:49.400 stronger position economically to respond, where they could say the 0:05:49.440 --> 0:05:52.240 Trump's tearuffs, fine, we can take a hit on exports 0:05:52.360 --> 0:05:55.880 because we can rely on the strong Chinese consumers. But 0:05:56.040 --> 0:05:59.800 now in twenty twenty five, Chinese economy is slowing. You've 0:05:59.800 --> 0:06:03.719 got Chinese consumers not spending. China's domestic demand has drunk 0:06:03.800 --> 0:06:06.719 so much that China has to rely on exports to 0:06:06.800 --> 0:06:08.240 absorb all that production. 0:06:08.680 --> 0:06:12.440 Right, Yes, so China thought it was prepared, right, it 0:06:12.600 --> 0:06:15.599 was trying to beef up its own self reliance in 0:06:15.640 --> 0:06:19.400 the supply chain. But in fact, by ignoring the middle 0:06:19.400 --> 0:06:23.920 class and by failing to foster a strong consumer culture, 0:06:24.240 --> 0:06:27.520 China is actually more vulnerable than before because in the 0:06:27.560 --> 0:06:30.320 global trade war, the economy that has the most powerful 0:06:30.360 --> 0:06:33.680 consumer base basically wings and Donald Trump knows that. Right, 0:06:33.800 --> 0:06:36.960 he can threaten terroriffs and say really nasty things on 0:06:37.000 --> 0:06:40.279 the global stage because he can basically shut off the 0:06:40.400 --> 0:06:45.080 access to the world's most resilient consumers, Americans, and China 0:06:45.120 --> 0:06:45.920 no longer has that. 0:06:46.480 --> 0:06:49.000 Jenny on the US side, what do you see as 0:06:49.040 --> 0:06:52.760 the biggest difference between Trump's latest trade war and the 0:06:52.800 --> 0:06:53.640 one in twenty eighteen. 0:06:53.839 --> 0:06:57.440 I think for Trump, this is faster and more furious 0:06:57.520 --> 0:07:00.000 than it was the first time around. First time around, 0:07:00.000 --> 0:07:03.279 and we had investigations, it was quite slow walking. First 0:07:03.360 --> 0:07:06.560 day in office. Is Bam, it's coming quick and it's broader. 0:07:07.240 --> 0:07:09.920 I think for China, I think they've been here before, 0:07:10.480 --> 0:07:13.120 and last time, during the last trade war, they unleashed 0:07:13.160 --> 0:07:16.880 this sort of wolf warrior tactic that was going toe 0:07:16.880 --> 0:07:20.600 to toe with Trump on the rhetoric, swinging back to 0:07:20.680 --> 0:07:23.160 every tweet he said, and I think they realized I 0:07:23.200 --> 0:07:27.239 did them no favors because that wolf warrior approach didn't 0:07:27.240 --> 0:07:30.760 go down well with other countries, and it just meant 0:07:30.760 --> 0:07:33.400 that Trump hit back all that bit harder. And I 0:07:33.440 --> 0:07:36.240 think this time they have learned from it and they're 0:07:36.280 --> 0:07:38.200 going to be very careful. So I think it was 0:07:38.320 --> 0:07:41.200 just they've had four years to think about this and 0:07:41.240 --> 0:07:43.920 how they do things differently this time around, and so 0:07:44.040 --> 0:07:46.160 I think they are coming back with a much more 0:07:46.200 --> 0:07:49.680 considered response. Last time they were just responding to the 0:07:49.800 --> 0:07:52.080 chaos of Trump when everyone was getting to know what 0:07:52.120 --> 0:07:54.160 Trump was like, and now they have a much better 0:07:54.160 --> 0:07:56.760 read on him and sort of how to protect themselves. 0:07:57.040 --> 0:07:59.600 So how can China protect itself? I mean, there's been 0:07:59.680 --> 0:08:03.040 tark about it behaving like the more sensible adult in 0:08:03.120 --> 0:08:05.840 the room. Will that help it to avoid a full 0:08:05.880 --> 0:08:06.840 blown trade war? 0:08:07.120 --> 0:08:10.720 I wouldn't necessarily call China being the adult in the room. 0:08:11.480 --> 0:08:13.920 I guess this time around, they are just trying to 0:08:13.960 --> 0:08:17.120 play a little bit smarter. Instead of going in a 0:08:17.160 --> 0:08:20.480 hard boxing match with Trump, they are playing basically the 0:08:20.560 --> 0:08:24.200 Chinese taichi. They're just trying to play soft and the 0:08:24.280 --> 0:08:27.880 elusive and the hope that the Trump will self destruct 0:08:27.920 --> 0:08:29.080 in the meantime. 0:08:29.600 --> 0:08:33.239 If China's approach is like slow Tai Chi on tariffs, 0:08:33.440 --> 0:08:38.040 Trump is taking the opposite tack. On Monday, Trump doubled 0:08:38.040 --> 0:08:40.960 down and slapped a twenty five percent tariff on all 0:08:41.040 --> 0:08:44.920 steel and aluminum coming into the US. China doesn't export 0:08:45.000 --> 0:08:47.720 a lot of these metals directly to the US, but 0:08:47.800 --> 0:08:51.360 it does dominate the global steel and aluminum industries and 0:08:51.440 --> 0:08:55.040 sells its products to countries like Canada and Mexico. They 0:08:55.040 --> 0:08:57.640 then process the metal and sell it on to the US. 0:08:58.160 --> 0:09:01.439 So while the tariff is not directed China, China and 0:09:01.440 --> 0:09:08.720 as trading partners, do end up taking the hit. After 0:09:08.760 --> 0:09:11.880 the break, we'll look at how She's handling Trump's tariffs 0:09:12.120 --> 0:09:15.080 and what China's trade war game plan could look like. 0:09:24.840 --> 0:09:27.800 Even though China's economy today is in a much more 0:09:27.840 --> 0:09:31.160 fragile state than it was in twenty eighteen. That doesn't 0:09:31.200 --> 0:09:33.240 mean that it's out of options when it comes to 0:09:33.240 --> 0:09:37.040 fighting a trade war, Bloomberg. Shuly Wren says, in the 0:09:37.160 --> 0:09:41.240 years since Donald Trump first launched his tariffs, Beijing has 0:09:41.280 --> 0:09:44.920 been working to prepare the Chinese economy for a second strike. 0:09:45.360 --> 0:09:48.080 In twenty eighteen, the trade war that President Trump launched 0:09:48.120 --> 0:09:51.719 basically was unexpected, right, and a lot of Chinese exporters 0:09:51.800 --> 0:09:54.640 they were hurt, for sure. But these days they are 0:09:54.679 --> 0:09:59.240 trying very hard to diversify the opening factories around the world. 0:09:59.360 --> 0:10:02.839 Basically have moved all everywhere, to Mexico to Vienna. 0:10:03.040 --> 0:10:07.160 Besides moving supply chains outside of China, Truly, says, China 0:10:07.200 --> 0:10:11.440 has also reduced reliance on exports to the US. Back 0:10:11.480 --> 0:10:14.160 in twenty eighteen, the US accounted for close to twenty 0:10:14.240 --> 0:10:19.400 percent of China's exports. Now it's only some fifteen percent. Suly. 0:10:19.840 --> 0:10:22.680 What more tools or other tools does China have and 0:10:22.720 --> 0:10:26.120 its kit to deploy against Trump's trade war compared to 0:10:26.120 --> 0:10:27.040 twenty eighteen. 0:10:27.040 --> 0:10:31.680 Well, China has TikTok this time. Basically it could be 0:10:31.960 --> 0:10:35.360 a good will towards Trump, because Trump has talked about 0:10:35.400 --> 0:10:39.240 wanting to have TikTok for cheap, and perhaps the social 0:10:39.320 --> 0:10:41.880 media can go IPO in New York and the US 0:10:41.960 --> 0:10:44.800 government can make quite a bigger profit out of it. 0:10:45.000 --> 0:10:48.400 So that's one tool that China could use and say, hey, 0:10:48.520 --> 0:10:51.160 let me give you a nice gift. How about making 0:10:51.240 --> 0:10:54.800 one hundred percent return on a bigger social media platform. 0:10:55.120 --> 0:10:57.920 There are other tools that the Shi Chimpin could use, 0:10:58.120 --> 0:11:02.240 but none of them will be very palatable to him. 0:11:02.400 --> 0:11:05.840 For instance, the first time around, China did use the 0:11:05.960 --> 0:11:09.839 un it cheapened its currency to counter Trump's twenty five 0:11:09.880 --> 0:11:13.040 percent terraff. This time around, China could still do that, 0:11:13.280 --> 0:11:17.000 but the pressure of capital outflow is just that much stronger. 0:11:17.040 --> 0:11:20.360 The economy is not doing very well. Investment returns in 0:11:20.480 --> 0:11:23.920 China are very dismal, and people naturally want to put 0:11:23.960 --> 0:11:27.080 money out of China. And if you weaken your currency 0:11:27.120 --> 0:11:30.240 by another, say ten to fifteen percent, the pressure of 0:11:30.240 --> 0:11:33.679 outflow it will just be that much greater. Another tool 0:11:33.840 --> 0:11:37.520 is perhaps using stimulus, the big one that China did 0:11:37.600 --> 0:11:41.160 after the global financial crisis. Again, it's not a good 0:11:41.160 --> 0:11:44.640 option because China's decked to GDB racial is already at 0:11:44.679 --> 0:11:48.719 three hundred percent. It's one of the world's most indebted nations. 0:11:49.080 --> 0:11:51.720 So if we're talking about stimulus, we will have to 0:11:51.800 --> 0:11:55.560 talk about perhaps five percent of GDP every year for 0:11:55.760 --> 0:11:58.640 years to come, and that's going to add even more 0:11:58.720 --> 0:11:59.760 debt to the economy. 0:12:00.000 --> 0:12:02.880 Now, China has a reputation for playing the long game, 0:12:03.200 --> 0:12:05.120 while the US, on the other hand, seems to have 0:12:05.200 --> 0:12:08.520 a much shorter attention span. How do we think that 0:12:08.600 --> 0:12:11.160 tilts the balance in these trade negotiations? 0:12:11.360 --> 0:12:13.960 I mean present shating Ping of course thinks he has 0:12:14.040 --> 0:12:16.960 a lot more time to burn them present charmp Right, 0:12:17.080 --> 0:12:19.840 he's only seventy one year old, and he doesn't face 0:12:19.920 --> 0:12:23.240 term limits, not anymore, right, so he thinks he might 0:12:23.280 --> 0:12:25.880 have a long game. But I am worried that the 0:12:25.920 --> 0:12:28.280 government in Beijing could be a little bit too complacent. 0:12:28.640 --> 0:12:33.040 What if China's economy just collapsed over the next four years. 0:12:33.120 --> 0:12:35.080 There is systemic risks in China. 0:12:35.240 --> 0:12:36.520 Here's Jenny Marshagan. 0:12:36.920 --> 0:12:39.439 I think that's right. I mean, I think beijing strategies 0:12:39.480 --> 0:12:42.120 just damage limitation. Let's just try and get through the 0:12:42.200 --> 0:12:44.600 next four years with as little damage as possible. They 0:12:44.640 --> 0:12:47.959 know they're going to be tariffs, And I also wonder 0:12:48.000 --> 0:12:50.240 if thinking at where the opportunities might be for them, 0:12:50.679 --> 0:12:54.160 because this time around, they're not the only target for Trump. 0:12:54.200 --> 0:12:56.959 He's going to target the European Union. He said, he's 0:12:57.040 --> 0:13:00.800 making these extraordinary expansionist claims. He wants to sort of 0:13:00.840 --> 0:13:04.079 buy Greenland and take over the guards of strip. That's 0:13:04.120 --> 0:13:06.079 going to go down, you'd think very badly in the 0:13:06.120 --> 0:13:09.600 global South. So for China, is there an opportunity there? 0:13:10.040 --> 0:13:12.439 One of the biggest things of Biden achieved was sort 0:13:12.480 --> 0:13:14.920 of getting the allies to come all in line with 0:13:15.040 --> 0:13:17.600 US policy. And if that's all going to fraction, now, 0:13:18.120 --> 0:13:22.400 can Beijing Brussels closer make amends with South Korea and Japan? 0:13:23.040 --> 0:13:25.040 So I imagine they'll sort of be looking for like 0:13:25.200 --> 0:13:27.320 where they can actually win during this trade war? 0:13:27.800 --> 0:13:31.000 And how would Trump counter attack in this trade war? 0:13:31.160 --> 0:13:34.480 If he senses that China's gaining the upper hand, are 0:13:34.480 --> 0:13:37.160 we going to see him wheel tariffs with more force 0:13:37.280 --> 0:13:38.040 this time around? 0:13:38.320 --> 0:13:42.440 All indications are yes, But then the caveat is Trump 0:13:42.480 --> 0:13:45.560 is so unpredictable the amount of uturns. He's already done. 0:13:46.040 --> 0:13:50.439 He's given Mexico and Canada this reprieve, and he's had 0:13:50.480 --> 0:13:52.920 four years to think about tariffs and what he didn't 0:13:52.960 --> 0:13:56.400 achieve last term, and he's got this sort of strong 0:13:56.760 --> 0:14:00.800 cabinet around him. He's got he's loyalists, people who was 0:14:00.840 --> 0:14:03.560 singing from the same hymn sheet, and he has much 0:14:03.600 --> 0:14:05.319 stronger mandate as well to do all of this. 0:14:05.920 --> 0:14:07.680 Now, surely do you think there could be other ways 0:14:07.720 --> 0:14:10.080 that Trump could try to target China where it hurts. 0:14:10.200 --> 0:14:12.840 Terriff is a very obvious choice for him, but there 0:14:12.840 --> 0:14:15.880 are other things that he can paint China on Presenting 0:14:15.960 --> 0:14:19.680 Pin cares very much about upgrading China's industrial sector right, 0:14:19.960 --> 0:14:23.560 and he can impose more export controls on China, and 0:14:23.640 --> 0:14:27.440 that hurts the sentiments back in China. Basically presenting Pain 0:14:27.680 --> 0:14:31.000 likes to portray himself as a big character on the 0:14:31.040 --> 0:14:34.280 world stage, and in China people don't call him directly 0:14:34.320 --> 0:14:37.600 by name. They call him Dada basically means mister big. 0:14:37.880 --> 0:14:40.160 And he has talked a big game. He has talked 0:14:40.160 --> 0:14:44.120 about China dream right, and China establishing a multipolar world 0:14:44.280 --> 0:14:48.000 and not being dominated by this one big bully in 0:14:48.000 --> 0:14:51.280 the United States. Basically, but I'm not sure that his 0:14:51.480 --> 0:14:56.360 deeds have been matched by his words. Let's take a 0:14:56.360 --> 0:14:59.000 look at the economy. It's not going anywhere, right, He 0:14:59.120 --> 0:15:03.200 tried to buffer China against the external shocks after the 0:15:03.280 --> 0:15:06.280 twenty eighteen trade war, and the Chinese economy is more 0:15:06.360 --> 0:15:07.320 vulnerable than ever. 0:15:07.600 --> 0:15:07.800 Now. 0:15:07.880 --> 0:15:09.840 What can we expect in the weeks and months to 0:15:09.880 --> 0:15:11.080 follow on tariffs? 0:15:11.680 --> 0:15:15.400 A lot of back and forth negotiations, and I suspect 0:15:15.400 --> 0:15:16.960 President Trump is going to paint him. 0:15:17.120 --> 0:15:20.640 You know, there's this April one deadline, the trumpetermenication to 0:15:20.680 --> 0:15:23.600 report back to Trump on the first trade war, and 0:15:23.640 --> 0:15:26.120 once that happens, then I think sort of full more 0:15:26.160 --> 0:15:29.840 negotiations will start with China, So we'll have a restart 0:15:29.880 --> 0:15:32.240 of those sort of trade war talks we had last time, 0:15:32.320 --> 0:15:34.520 and it'll be interesting to see who she didn't think 0:15:34.520 --> 0:15:35.560 puts forward this time. 0:15:36.040 --> 0:15:38.280 Do you see anyway for the US and China to 0:15:38.320 --> 0:15:40.440 avoid the full blown trade war. 0:15:41.200 --> 0:15:44.800 I don't at this point. I think the deflationary pressure 0:15:44.880 --> 0:15:48.400 in China is so strong that Chinese companies will be 0:15:48.600 --> 0:15:52.680 very keen to export their products and services to the 0:15:52.720 --> 0:15:55.360 rest of the world, especially to the US, because profit 0:15:55.400 --> 0:15:58.920 margins are just that high, and that if President Trump 0:15:59.040 --> 0:16:02.920 really clears up while protecting US labor, he is going 0:16:02.960 --> 0:16:06.920 to use terraffs and the trade war to stop basically 0:16:07.000 --> 0:16:08.000 China eating the world. 0:16:08.360 --> 0:16:11.080 What are the risks you see beyond trade? If the 0:16:11.160 --> 0:16:14.320 US is the instigator of trade wars with multiple countries, 0:16:14.760 --> 0:16:17.240 does this in any way leave room for China to 0:16:17.320 --> 0:16:18.920 step up on the world stage. 0:16:19.880 --> 0:16:23.960 Trump is basically saying things which is so shocking to 0:16:24.000 --> 0:16:26.480 sort of the rules based world order that America has 0:16:26.480 --> 0:16:30.800 been the custodian of for decades, talking about taking over 0:16:30.840 --> 0:16:35.040 the guards a strip or buying Greenland, or even annexing Canada. 0:16:35.160 --> 0:16:37.920 This sort of does create some room, you think, for 0:16:38.000 --> 0:16:40.880 Beijing to sort of amp up its rhetoric around Taiwan. 0:16:41.120 --> 0:16:44.520 The US has been the leading figure opposing Chooting Ping's 0:16:44.600 --> 0:16:48.720 territorial kind of rhetoric around Taiwan, his ambitions to take Taiwan. 0:16:49.160 --> 0:16:52.080 And if you then have a US leader who himself 0:16:52.080 --> 0:16:55.400 has all these sort of empire building aspirations, that makes 0:16:55.440 --> 0:16:57.120 it much harder for the US to sort of have 0:16:57.200 --> 0:17:00.000 the moral high ground to be trying to restrain China. 0:17:00.000 --> 0:17:02.760 I'm restrained. She That doesn't mean she didn't. Ping's gonna 0:17:02.760 --> 0:17:05.919 invade Taiwan anytime soon, but it just means he's got 0:17:05.960 --> 0:17:09.040 a little bit more space now around that issue. And 0:17:09.080 --> 0:17:10.960 I think that could be a dangerous. 0:17:10.520 --> 0:17:14.479 Thing, Jenny, and truly thanks so much for sharing your 0:17:14.480 --> 0:17:20.880 insights with us. This is The Big Take Asia from 0:17:20.880 --> 0:17:21.680 Bloomberg News. 0:17:21.880 --> 0:17:22.399 I'm wan ha. 0:17:23.320 --> 0:17:26.439 This episode was produced by Young Young, Naomi Um and 0:17:26.520 --> 0:17:30.040 Jessica Beck. It was edited by Patty Hirsh and Daniel 0:17:30.080 --> 0:17:34.080 tien Kaid. It was fact checked by Adriana Tapia and Naomi. 0:17:34.560 --> 0:17:37.680 It was mixed by Alex Suguiera and sound designed by Jessica. 0:17:38.440 --> 0:17:41.760 Our senior producer is Naomi Shaven. Our senior editor is 0:17:41.800 --> 0:17:46.080 Elizabeth Ponso. Our executive producer is Nicole Beemster Brower. Sage 0:17:46.080 --> 0:17:50.200 Bauman is Bloomberg's head of Podcasts. If you like this episode, 0:17:50.240 --> 0:17:53.000 make sure to subscribe and review The Big Take Asia 0:17:53.119 --> 0:17:56.320 wherever you listen to podcasts. It really helps people find 0:17:56.359 --> 0:17:59.040 the show. Thanks for listening, See you next time.